* Weakening dollar buoys commodity markets
* Lower corn yields, strong soy demand support
U.S. corn futures rose nearly 1 percent on Thursday, while wheat gained half a percent as a
weaker dollar supported the grain markets amid an outlook of tight global corn supplies and
adverse weather for wheat crops.
Soybeans rose 0.3 percent in Asian trade, underpinned by rising demand from China, the world's
biggest importer.
"The dollar index is down and it could be having an impact," said Brett Cooper, a senior manager
of markets at FCStone Australia. "There are some quality concerns as far as wheat goes on the
east coast of Australia.
Chicago Board of Trade December corn rose 1 percent to $5.72-¼ a bushel by 0309 GMT and
December wheat WZ0) added 0.5 percent to $7.13-¾ a bushel.
CBOT November soybeans rose 0.3 percent to $13.14 a bushel and more actively traded January
soy was up 0.8 percent to $13.30 a bushel.
The U.S. dollar lost a bit of its allure in Asia on Thursday after four straight days of gains, but
sterling looked set to rise further as investors cut bets the Bank of England will inject more
stimulus into the economy., which measures the strength of the dollar against a basket of
currencies, was down 0.2 percent. A weaker dollar usually makes U.S. commodities more
competitive in the international market and encourages investment in risky assets.
Dry weather has continued to stress the development of soft red winter wheat in the U.S. east and southern Midwest, although there are expectations of some rains in the coming days. And the
wheat harvest in Australia, the world's 4th largest exporter, has been delayed because of
excessive rains.
Analysts said there was additional support for the wheat market from Egypt's purchase of U.S.
wheat in a tender. Egypt, the world's largest wheat importer, bought 115,000 tonnes of U.S.
wheat in its purchase on Wednesday of a total 235,000 tonnes.
The USDA on Tuesday cut its estimate for U.S. corn production by 1 percent due to
disappointing yields, as was broadly expected, and said only a scant three-week supply would be
available by next fall. The soybean market has been buoyed by rising exports to China and
lower-than-expected U.S. output.
The USDA cut its U.S. soy yield forecast on Tuesday to 43.9 bushels per acre, down from an
October outlook for 44.4 bpa. Analysts were expecting an increase to 44.7.
Private exporters reported the sale of 110,000 tonnes of U.S. soybeans and 30,000 tonnes of U.S. soybean oil to China for delivery this marketing year, the Agriculture Department said.
"On the beans front, there is an idea that China will import more beans than what the USDA has
estimated," said Cooper.
Still, Brazil's crop supply agency Conab maintained its estimate for a near record soybean crop in
2010/11 while raising its forecast for cotton to what would be a new record.